The fallout continues over yesterday’s big takeout by Reuters on possible collusion between Cheasapeake Energy and Encana to suppress land prices in Michigan. The state is taking a hard look at the deal and as is pointed out in today’s follow up story, the land in question is now going to be tied up in the investigation.
About 80 percent of Chesapeake’s Michigan acreage is located on land it leased from the state. “I assume the state of Michigan will be fairly aggressive in investigating the alleged improprieties raised in the article, and similarly private landowners also appear to have some basis for seeking damages” if the companies conspired to keep land prices low, said Mark Hanson, an oil analyst with Morningstar in Chicago.
(Also of note via Reuters is yet another cautionary tale of land speculation and fracking)
While the Michigan story continues to unfold, the other major fracking headline comes from comments yesterday by Energy Secretary Ken Salazar that the feds need to step in and regulate the industry. Via The Times:
“There are some who are saying that it’s not something we ought to do, it should be left up to the states. That’s not good enough for me because states are at very different level, some have zero, some have decent rules.”
If the feds get involved, especially if they put in place a comprehensive set of rules, what the General Assembly just set in motion to deal with fracking will need to produce regulations and rules that jive with the federal regs or be superceded by them.
New fed regs will also likely spell out what the states can and can’t do.
That process could slow the process in North Carolina or at the very least force a rewrite of whatever rules DENR comes up with in the interim.